Pexip Holding

Earnings Release • Jan 7, 2021

Pexip Announces Annual Recurring Revenue Growth of 73 %

Pexip Announces Annual Recurring Revenue Growth of 73 %

(Oslo, Norway, 7 January 2021) In this trading update, Pexip presents its Annual

Recurring Revenue (ARR) for the fourth quarter (Q4) of 2020. In Q4 2020, Pexip

increased its ARR with 73% year-on-year to USD 81.9 million.

·

Pexip's subscription base measured in ARR reached USD 81.9 million in Q4 2020,

up from USD 47.2 million in Q4 2019, representing a year-on-year increase of

73%.

· Of the 73% year-on-year growth in ARR, 59 percentage points (pp) are from

new customers and 14 pp are from existing customers. Net revenue retention rate,

reflecting the percent of retained revenue from existing customers, was 114%

year-on-year, including churn of -10% year-on-year.

· Pexip generated new ARR (delta ARR) of USD 9.1 million in Q4 2020, compared

to USD 4.4 million in Q4 2019, representing an increase in delta ARR of 108%

year-on-year.

· USD 1.6 million of the delta ARR in Q4 2020 was the result of a customer

base acquisition in July 2020, which is now completed.

· ARR from Pexip's Infinity software platform reached USD 49.0 million in Q4

2020, up 55% year-on-year, while ARR from Pexip's cloud service reached USD 32.9

million, up 109% year-on-year.

· The company is on track to reach USD 300 million in ARR by 2024.

"I am very pleased with the excellent performance of the team in Q4 and

throughout 2020, providing a strong momentum for Pexip going into 2021. We are

experiencing a high demand from large enterprise customers and public sector

organizations with complex requirements that are preparing for a post Covid-19

working environment, where video conferencing will play a central role in the

new normal of hybrid working", said Pexip CEO, Odd Sverre Østlie.

Key Contracts Awarded in Q4

United States Government Defense Health Agency (US DHA)

· Building further on an existing relationship, Pexip was awarded an

additional contract with the United States Government Defense Health Agency (US

DHA) taking the account to approximately USD 2 million in annual recurring

revenue to Pexip.  The contract is an enterprise-wide license agreement for

Pexip's Infinity software platform and will enable US DHA to provide virtual

healthcare visits to all active-duty members. The contract was signed through

the systems integrator Leidos, a Fortune 500 technology provider with 38,000

employees.

The German Aerospace Center (Deutsches Zentrum für Luft- und Raumfahrt - DLR)

· The DLR has chosen Pexip's Infinity software platform as their strategic

video conferencing solution. The product's licensing has been set up in a first

installment for the duration of the coming five years. The DLR is the Federal

Republic of Germany's research center for aeronautics and space with over 9,000

employees. This contract will help strengthen Pexip's brand awareness in the

public sector in Germany. The contract value is confidential and cannot be

disclosed.

Multi-national, European industrial manufacturer

· On 7 December 2020, Pexip announced a new contract with a multi-national,

European industrial manufacturer for Pexip's cloud service Enterprise room

connector for Google Meet. Pexip is the only provider globally that can enable

video interoperability with the Google Meet platform. The total gross value of

the contract is USD 580,000 per year including partner margin, and was won

together with Pexip's partner, NTT, a global ICT provider employing more than

40,000 people.

IR Policy for Announcements of New Contracts

In addition to announcements required by the Norwegian Securities Trading Act §

5-2, Pexip will announce, on an ongoing basis, new contract awards that the

company deems substantial. The significance of the contract will be determined

by the contract value relative to the total Annual Recurring Revenue as well as

other market or strategic aspects of the contract.

Pexip will present the full fourth quarter 2020 interim report on 11[ ]February

This information is subject to the disclosure requirements pursuant to Section 5

-12 of the Norwegian Securities Trading Act.

For questions, please contact,

Investors: Mirza Koristovic,  Director Investor Relations, IR@pexip.com, +47 93

87 05 25

Media: Lars-Einar Petterson, Communication Manager,

Lars.einar.petterson@pexip.com, +47 93 44 88 27

About Pexip | pexip.com

Pexip simplifies complex videoconferencing to empower organizations with face-to

-face collaboration, no matter the location or technology. Our scalable platform

enables high-quality video meetings, with enterprise-grade security, and is

easily adapted to fit customers' IT requirements and existing infrastructure.

This makes Pexip the leading provider for  large enterprises and public sector

organizations. The solution is sold through 300 channel partners in 75 countries

and used in more than 190 countries. Pexip was listed on the Oslo Børs in May

2020.